Item 5. Market for Registrant’s Common Equity
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
There is currently no market for our securities, and we do not expect that a market for our shares will develop in the future. We are prohibited under the 1940 Act from selling our shares of Common Stock at an offering price, after deducting selling commissions and dealer manager fees, that is below our NAV per share attributable to Common Stock unless we obtain stockholder approval. In connection with any issuance of shares of our Common Stock, our Board of Directors or a committee thereof will review the then current offering price per share against the current estimated NAV per share attributable to Common Stock to ensure that we were not selling shares of our Common Stock at a price which, after deducting selling commissions and dealer manager fees, was below our NAV per share.
Set forth below is a chart describing the classes of our securities outstanding as of December 31, 2022:
Title of Class Amount Authorized Amount Outstanding
Common Stock, par value $0.001 per share 450,000,000 24,609,132
Series A Convertible Preferred Stock, par value $0.001 per share 50,000,000 36,147
As of December 31, 2022, we had issued 24.6 million shares of Common Stock for net proceeds of $373.7 million, including the shares purchased by affiliates and shares issued under our distribution reinvestment plan (the “DRIP”). We had also issued 36,147 shares of Series A Preferred Stock for gross proceeds of $36.1 million. As of December 31, 2022, we had 1,631 and 4 record holders of our Common Stock and Series A Preferred Stock, respectively.
Distributions
To maintain our RIC qualification, we must, among other things, distribute at least 90% of our net ordinary income and net short-term capital gain in excess of net long-term capital loss, if any, to our stockholders. In order to avoid certain excise taxes imposed on RICs, we currently intend to distribute, or be deemed to distribute, during each calendar year an amount at least equal to the sum of: (1) 98% of our net ordinary income for the calendar year; (2) 98.2% of our capital gain in excess of capital loss for the calendar year; and (3) any net ordinary income and net capital gain for preceding years that were not distributed during such years and on which we paid no U.S. federal income tax. We can offer no assurance that we will achieve results that will permit the payment of any distributions and, if we issue senior securities, we will be prohibited from paying distributions if doing so causes us to fail to maintain the asset coverage ratios stipulated by the 1940 Act or if distributions are limited by the terms of any of our borrowings.
Our Board of Directors intends to declare and pay distributions on a quarterly basis. We have a DRIP pursuant to which we reinvest all cash dividends or distributions declared by our Board of Directors on behalf of investors who do not elect to receive their distributions in cash (the “Participants”). As a result, if our Board of Directors declares a distribution, then stockholders who have not elected to “opt out” of the DRIP will have their distributions automatically reinvested in additional shares of our Common Stock at a price equal to NAV per share as estimated in good faith by us on the payment date. The timing and amount of any future distributions to stockholders are subject to applicable legal restrictions and the sole discretion of our Board of Directors.
We have not established limits on the amount of funds we may use from available sources to fund distributions. We may have distributions which could be characterized as a return of capital for tax purposes. During the years ended December 31, 2022 and 2021, and for the period ended December 31, 2020, no portion of our distributions were characterized as return of capital for tax purposes, respectively.
Sales of Unregistered Securities
Except as previously reported by the Company on its Current Reports on Form 8-K, the Company did not sell any securities during the period covered by this Form 10-K that were not registered under the Securities Act.
ITEM 6. [Reserved]
Not Applicable.
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